Thursday, May 28, 2015

MüRe report Q1 2015

MüRe, Q1, 2015, front page

I have started to catch up and with this summary I am only three weeks after the publication date! MüRe is my favourite reinsurance company that have over the years treated me very well. So what did then the first quarter look like?

For the report in full please go here and for my previous summary go to MüRe annual report 2014 and to find out more about MüRe please visit analysis of MüRe 2015.

Hmmmm... Mr. Bomhard once again kept complaining about the investment climate and how they were forced to write down a debt due to the Austrian bank that defaulted. He kept complaining about that the Austrian province should honour the guarantees that they gave. My question is... why should any region or country for that matter give guarantees to creditors regarding a company? Bank or not? A government needs to protect the population and their savings but the creditors? Why should they be given any guarantee? This kind of nonsense needs to be stopped (here I also mean that regions and countries give out guarantees for banks to attract investors) and MüRe obviously wanted the high interest rate that they got from a bank on the verge of bankruptcy assuming it was risk free. Well, wake up and smell the roses Mr. Bomhard!

Below we see the key figures from MüRe and it is not looking very good. The earnings are down by -16% and the ROE has dropped from 14% to less than 10%. The only good thing is that the book value has substantially increased by 16% which mainly comes from unrealised gains on their investments so as it arrived it can also go away.

MüRe, Q1, 2015, key figures

Now we take a look at the income statement and there we see that they managed to increase the premiums written both compared to last quarter as well as to Q1 in 2014. I hope that this indicates a minimal change in the trend but it could also be the worst scenario which would mean that they accept riskier premiums which will in the end lead to higher pay outs. Anyway... not much is happening in MüRe and they keep bringing in their 4+ € quarter after quarter.

MüRe, Q1, 2015, income statement

Conclusion: My employed CEO Mr. Bomhard worries me and I hope that he will have a good quarter soon so that he will stop to complain so much. If we look at the earnings then MüRe did well in Q1 2015. Since Mr. Bomhard decided to talk down the share price we have seen a drop of almost -15% I guess the high share price disrupted his share buy back program or something. Either way having a CEO talking down the share price is not normal and border case to crazy. I will remain shareholder but I am getting more and more grumpy concerning my CEO.

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